U.S. to Cut Satellite Program : Defense: Spacecraft industry seeks to reverse landmark cancellation of Air Force’s advanced-warning system.

The Air Force has told TRW Inc. and Lockheed Corp. that it will end the $13.3-billion program for a new satellite system to warn of a ballistic missile attack, marking the first major cancellation of a military space program since the end of the Cold War.

The demise of the program--known as the Follow-on Early Warning System (FEWS)--came in a private meeting last week when Undersecretary of Defense John Deutch ordered senior Air Force officials to end the effort, according to an internal Air Force memo obtained by The Times.

The spacecraft industry is mounting an effort to reverse the decision, and some senior Air Force officials oppose the move as well.

Maj. Gen. Garry Schnelzer, the Air Force’s senior space acquisitions official, told Deutch during last week’s meeting that FEWS should be preserved. But Deutch cut off any further debate, saying: “Let me start over. . . . FEWS is zero,” according to the memo.

An estimated 1,000 to 2,000 jobs at California contractors and government offices could be lost, but, equally important, the cancellation signals in graphic terms the Pentagon’s reluctance to support high-cost space systems that have borne little of the brunt of defense spending cuts so far.

Many highly advanced weapons--ranging from nuclear submarines to stealth jets--were once justified by the nuclear standoff with the Soviet Union, but analysts say those projects now face a difficult future. With weaker rivals, the United States may no longer need to pay a premium for the best technology.

However, in his order canceling FEWS, Deutch also agreed to spend $1.4 billion to develop a new early-warning satellite for launch in 2004 or 2005, according to the memo. His decision delays deployment of a new generation of warning satellites by about five years and gives the Pentagon time to assess how much capability it will need.

Deutch told Air Force officials that $2 billion had to come out of the budget for early-warning systems, both by killing FEWS and by cutting back TRW’s existing Defense Support Program to one satellite from three, according to the memo.

The contractors involved in FEWS are not taking the cancellations passively.

“It is an open issue,” one industry official said. “There are still some options that are being discussed in Washington.”

TRW and Lockheed, which are competing for the FEWS production contract, declined to comment. Neither would they say how many jobs at their companies and subcontractors are supported by the program.

In briefings with defense officials, Lockheed has said its contractor team includes 1,000 workers. TRW is presumed to have an equal number, according to an industry official, but TRW said last year that it had 300 workers on the program, along with its partner, Grumman Corp.

Lockheed is teamed with Hughes Aircraft’s El Segundo operation, while TRW is teamed with Grumman’s unit in Irvine.

The FEWS termination comes after the Air Force has spent roughly $1 billion since the late 1970s on the system, which has gone through several reincarnations and name changes reflecting the changing political realities of the defense budget.

“FEWS is the first time there has been a military space system terminated as a result of the end of the Cold War,” said John Pike, an analyst at the Federation of American Scientists. “This will be a harbinger for the rest of the military space programs, which have not been forced to draw down like everybody else.”

The abandonment of a complex system such as FEWS, which takes observations of the Earth every few seconds to search for ballistic missiles, is a departure from the Cold War standard of picking only the most capable technologies, Pike said. The cancellation of the Navy AX attack jet was another instance of such a decision.

Meanwhile, government proponents of an alternative, low-cost successor to DSP, known as DSP-II, were also left disappointed by Deutch’s decision because their program apparently will not be funded either. The Air Force is investigating charges that senior officials suppressed information about DSP-II.

If the Pentagon invests $1.4 billion in technology through 1999, many of the 1,000 to 2,000 workers now on the FEWS program might not lose their jobs, although that funding is far less than would have been spent.

The memo also said the Air Force would attempt to “smooth the transition” in ending FEWS, saying it would end the program “at a logical point and get the most out of our money currently on contract.” Such a plan could delay a formal announcement of the cancellation for many weeks.